/CME%20Group%20Inc%20Chicago%20office-by%20JHVEPhoto%20via%20iStock.jpg)
CME Group Inc. (CME), headquartered in Chicago, Illinois, operates contract markets for trading futures and options on futures contracts. Valued at $75.2 billion by market cap, it offers futures and options based on interest rates, equity indexes, foreign exchange, agricultural commodities, energy, metals, and more. It facilitates trading on its trading floors, electronic platform, and through privately negotiated transactions that it clears.
Shares of this leading derivatives marketplace have underperformed the broader market considerably over the past year. CME has gained 2.4% over this time frame, while the broader S&P 500 Index ($SPX) has rallied nearly 28.1%. In 2024, CME stock is down marginally, while SPX is up 17.3% on a YTD basis.
Narrowing the focus, CME has also lagged behind the iShares U.S. Broker-Dealers & Securities Exchanges ETF (IAI). The exchange-traded fund has gained about 33.5% over the past year. Moreover, the ETF’s 14.5% gains on a YTD basis outshine the stock’s marginal losses over the same time frame.
On Jul. 24, CME shares closed down marginally after reporting its Q2 results. Its adjusted EPS of $2.56 beat Wall Street expectations of $2.51. The company’s revenue was $1.53 billion, beating Wall Street forecasts of $1.52 billion. Its average daily volume (ADV) was 25.9 million contracts, including non-U.S. ADV, which reached a record 7.8 million contracts.
For the current fiscal year, ending in December, analysts expect CME’s EPS to grow 5.9% to $9.89 on a diluted basis. The company’s earnings surprise history is impressive. It beat the consensus estimate in each of the last four quarters.
Among the 16 analysts covering CME stock, the consensus is a “Moderate Buy.” That’s based on seven “Strong Buy” ratings, six “Holds,” and three “Strong Sells.”
On Jul. 25, Oppenheimer analyst Owen Lau maintained a “Buy” rating on CME with a price target of $228, implying a potential upside of 9.2% from current levels.
The mean price target of $217.07 represents a 4% premium to CME’s current price levels. The Street-high price target of $250 suggests an upside potential of 19.8%.
On the date of publication, Neha Panjwani did not have (either directly or indirectly) positions in any of the securities mentioned in this article. All information and data in this article is solely for informational purposes. For more information please view the Barchart Disclosure Policy here.
